subject
Business, 24.03.2020 23:12 coxb234

Suppose you were trying to value Box prior to its IPO using the free cash flow model. You estimate that Box has $34,000,000 of debt, no preferred stock, no short-term investments, and will not produce positve free cash flows until 5 years from now. You further estimate that Box has a weighted average cost of capital of 15% and will settle down to a constant growth rate of 5%. What is the MINIMUM FCF that Box would need to generate in year 5 to be valued at a $1 billion dollar market cap at its IPO today. For simplicity, assume that FCF in periods 1 through 4 are zero.

ansver
Answers: 1

Other questions on the subject: Business

image
Business, 22.06.2019 02:30, maxicanofb0011
Based on the supply and demand theory, why do medical doctors earn higher wages than child-care workers?
Answers: 1
image
Business, 22.06.2019 07:00, Maria3737
For the past six years, the price of slippery rock stock has been increasing at a rate of 8.21 percent a year. currently, the stock is priced at $43.40 a share and has a required return of 11.65 percent. what is the dividend yield? 3.20 percent 2.75 percent 3.69 percent
Answers: 3
image
Business, 22.06.2019 15:20, amulets5239
Sauer food company has decided to buy a new computer system with an expected life of three years. the cost is $440,000. the company can borrow $440,000 for three years at 14 percent annual interest or for one year at 12 percent annual interest. assume interest is paid in full at the end of each year. a. how much would sauer food company save in interest over the three-year life of the computer system if the one-year loan is utilized and the loan is rolled over (reborrowed) each year at the same 12 percent rate? compare this to the 14 percent three-year loan.
Answers: 3
image
Business, 22.06.2019 16:20, tristan4233
Carlos hears juan and rita’s complaints about the new employees with whom they have to work with, as well as their threats to quit the company. if carlos were to reassign juan and rita to new, unique roles and separate them from the ronny and bill, it would signal that carlos has moved into the stage of managing resistance.
Answers: 3
You know the right answer?
Suppose you were trying to value Box prior to its IPO using the free cash flow model. You estimate t...

Questions in other subjects:

Konu
Health, 02.10.2020 16:01
Konu
World Languages, 02.10.2020 16:01
Konu
Mathematics, 02.10.2020 16:01